Steamboat affordable housing policy that enjoys strong public support is being suspended again

The Yampa Valley Housing Authority is seeking a 10-year, one-mill property tax to help it develop more workforce housing like this apartment building.

STEAMBOAT SPRINGS — City rules that used to force developers in Steamboat Springs to help build affordable housing units are being suspended for a fifth time despite strong public support for the policy.

The Steamboat Springs City Council on Tuesday night agreed to extend the suspension of the affordable housing rules again until February.

Before the extended suspension becomes final, the council will have to take a second vote on the issue later this month.

The affordable housing rules, which were first suspended by a previous city council in 2013, specifically required residential developers to build deed-restricted, affordable housing units in their projects or pay a fee in lieu of their creation.

Developers who faced fees totaling more than $100,000 complained about the fairness and effectiveness of rules and spurred the former council to suspend them.

Current council members were hesitant Tuesday night to make any major changes to the city’s affordable housing policies on the eve of an election where voters will decide whether to increase their property taxes to generate an estimated $8.5 million over the next decade for workforce housing projects.

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“If we made a change right now immediately before that election, it could be confusing and concerning for people,” Council President Pro-Tem Jason Lacy said.

Lacy said he also wanted the council to consider ways the city could change its codes to incentivize the creation of affordable housing units in the low-income, seasonal and entry-level markets.

“We have a lot of sticks but not necessarily the carrots,” he said. “I want to get the incentives in there to get the type of housing we want.”

Since the affordable housing ordinance was first suspended four years ago, residents here have expressed strong support for the former rules in two community surveys.

The last community survey completed this year showed 77 percent of survey respondents favored the idea of making developers pitch in to help build affordable units.

Still, city councils have allowed the suspension to continue now for more than four years.

Councilwoman Kathi Meyer said Wednesday she also wants to see how a proposed property tax increase to fund Yampa Valley Housing Authority projects fares at the ballot box this fall before the council discusses whether to reinstate the previous housing rules.

She also said the housing authority determined the previous housing rules that made developers pitch in did not generate enough revenue to build the number of affordable housing projects the community needs.

"Inclusionary zoning was a carrot and a stick, with heavy on the stick," Meyer said referring to the suspended ordinance. "We need to look at the carrots and incentives we can put back in the code so we can encourage community housing."

The council plans to extend the suspension of the affordable housing rules until February 2018 and revisit the issue in January right before the suspension is set to expire.

During the seven years the affordable housing rules were in effect, they generated an obligation for developers to either construct 200 units or provide nearly $3.4 million in fees that would go into a community housing fund.

However, due to the economic recession, city officials said many of the projects were not built, and several affordable units were not realized.

Council members who voted to suspend the ordinance back in 2013 labeled the rules "flawed, wrong and unfair."

“Whether we're in a 2006 economy or the current economy, this ordinance is wrong,” then council member Cari Hermacinski said in the summer of 2013. “We're taxing housing because we want more housing, but it didn't work.”

Then council member Sonja Macys was the only one on the dais to oppose suspending the ordinance and feared that by doing so without a clear plan to draft a new one would hurt efforts to promote affordable housing in the community.

Four years later, subsequent councils have yet to replace the ordinance with any new policy.